According to Investopedia, bitcoin whales are a term that refers to individuals or entities holding large amounts of bitcoin. Approximately 1000 people, who own 40% of the market, fall into this category.
Whales have the potential to change currency valuations, and given the bitcoin fluctuations in recent weeks, they are gaining more and more attention.
The Telegraph reported Friday that about 13% of all Bitcoin, or about $ 80 billion, was in more than 100 individual accounts, according to industry data. He added that the top 40% of all bitcoin (about $ 240 billion) is held in total, just under 2,500 out of roughly 100 million accounts.
How do Bitcoin whales affect the price?
According to CoinDesk, the number of addresses holding more than 1,000 bitcoins consists of 2,334 addresses, the highest level of all time.
The Sun reported that individual trades made by such whales could lead to major changes in the bitcoin price and suppress the movements of smaller investors.
Bitcoin reached a record high of $ 41,973 on January 8th. However, on Friday, Insider reported that the cryptocurrency is on track for its biggest weekly price drop since September. It rose to about $ 32,170 on Saturday morning and has fallen nearly 10% since Monday.
In November, CoinDesk analyzed data from the crypto exchange OKEx to provide a possible explanation of how whales may affect prices as the coin soars. “During this bitcoin boom, institutions and whales were able to buy dips and often sold when prices went up. “This caused many of the individual investors to struggle to chase the rally,” he said.
David Gerard, author of Attack of the 50 Foot Blockchain and a well-known crypto critic, was quoted in The Telegraph report as saying: “The big players can easily change the price” because the Bitcoin trading market is so weak… any of them could crash it. ”
He said there is not much available volume for trade, adding that there are all kinds of “trade tricks” that would not be available in regulated markets.
What’s in the future for Bitcoin?
On Tuesday, Biden’s election for the treasury secretary, Janet Yellen, suggested that lawmakers restrict cryptocurrencies such as Bitcoin mainly due to concerns that they are used for illegal activities.
However, according to Yahoo Finance, a Biden administration can be friendly to crypto, as it chooses crypto expert Gary Gensler as SEC chief.
Insider published an article Thursday stating that the federal government’s signals to cryptocurrency are confusing.
The article was written by James Ledbetter, editor-in-chief and FIN editor and publisher for Clarim Media. “If the US wants to keep up with the global development of digital currencies, Biden’s team should clearly answer some fundamental questions, such as which ones to regulate as securities and approve a Bitcoin-based ETF?”
However, it is not yet clear whether these questions will be answered by the management in the near future.